calgirlfinance - to financial freedom

Money Confession: I Spend Whatever I Want

2008-05-08T08:15:00.001-07:00

While this is probably true of most people you know, this is probably not something you would expect from a personal finance blogger. I sometime feel guilty about the fact that I spend whatever I want, but I have a secret. I have trained myself to be mostly content with what I have, so I don’t want a lot.

One idea that I have seen again and again is how people really value experiences, not things. I used to be the opposite. I used to think that I would much rather get a really cute sweater than go to a concert. But then I realized that of course I would rather get a cute sweater than go to a concert since I don’t like music that much! It wasn’t that concept that was wrong, but it was my points of comparison. Now I’ve realized that rather than spending money on a cute sweater, I would be much happier to spend that money on the experience of a nice vacation. I have trained my brain to not even want to cute sweater very much since I am pretty content with my closet.

Of course it helps to stay out of stores too. I have most of the clothes that I need to be happy, but one place where I have the desire to spend is on home furnishings. We have very few items in our home that was purchased new. Most of our items were hand me downs from family and friends with a few items purchased from craigslist. I would love to have a semi matching living room set or even a bed with a headboard. I realized that I’ve never owned a bed with a headboard or any kind of frame beyond the basic metal ones that come with the bed in my whole life. But when I go to the store and think about spending hundreds or even thousands of dollars on new furniture, my mind talks me out of it since it know that I would much rather spend my money on a lifetime adventure.

Consider Renting a House for Your Next Vacation

2008-04-29T14:00:00.000-07:00

I just got back from a weekend trip. In total there were 6 people on the trip and we spent just about $350 for 3 nights of lodging at a private home. We found the house through VRBO (Vacation Rentals by Owner). We could have gotten accommodations in a slightly more convenient place for about $70/night. In total it would have been $140/night since that place could only sleep 4, so we would need to get 2 rooms. But that place was not very nice (think camping) The added benefit of renting a house is having facilities to cook. On the 3 day trip, we ended up eating out only once (this was because we couldn't find a convenient place to eat the sandwiches we packed so we ended up getting some fast food). Personally I really like renting houses since everyone ends up spending more time together. The house had 3 bedrooms, which was perfect for us since we all got a little bit of privacy too!

Money saved on accommodations = ($140*3) - $350 (cost of house rental)= $70
Money saved by not eating out = (7 meals * 6 people * $7) - $100 (estimated cost of all meals) = $194

Total saved = $244

This Month Our Cash Flow Is Negative

2008-04-23T15:20:00.000-07:00

Typically C and I are very good about spending less than we earn every month without a real budget. Not so this month.

1. We paid about $6,500 in taxes. I wasn't expecting it to be that much.
2. We finally bought our plane tickets for our upcoming month-long vacation.
3. And we both maxed out our Roth IRAs for 2007.

Granted the last item is actually a form of savings, but it feels like spending since it's harder to withdraw the money (whenever there are penalty and fees involved, I don't believe in taking the money out).

So with all of the expenses listed above, our checking account is down a lot. Normally we wouldn't even have enough money in our checking account to cover all of those items, but about a month ago, I realized that the interest rate on an ING Checking account with a balance of over $50K was actually higher than the interest rate on the savings account. The rate isn't that different, but when I saw this, I realized that I was potentially missing out on $100-$200 in the course of a year.

C and I have several sub-accounts in ING for our home down payment, emergency savings, vacation savings, and my early retirement contribution. All together, these totaled over $50K so I decided to put it all in the checking account.

Now the thing that is unclear to me is where should all of this spending be coming out of? Obviously, the plane tickets come from our vacation fund. But do taxes come out of our down payment fund or our emergency fund?

I'm not sure putting all of our money together is a good idea since it is hard to control spending and savings goals. I know I could just spend 30 minutes a month working on it, but I must admit. I'm lazy.

Today is the LAST Day to Fund Your IRA for 2007

2008-04-15T15:00:00.000-07:00

Today I took the opportunity to fund my Roth IRA for 2007. Why did I wait so long? Well if you saw my earlier post on taxes, you know we just finished them over the weekend. I wanted to make sure C and I didn't exceed the income limit to make the full contribution. Once we had our AGI figured out, I knew that I should fund my Roth ASAP. But I made the mistake of not having enough money in my BofA checking account nor directly with Schwab, where I have my Roth. I had all the money in my ING account and I could have sent a check from it, but I felt more secure transferring the money to my BofA checking account so I could make the deposit in person. I ended up starting these transfers last Thursday. The money was fully transferred into my BofA account today with no holds, so I was free to deposit that check!

Yippee!!

The one lesson I learned here is it's good to not cut things so closely. There were some online transferring options that I wanted to do, but it would have taken too long for the money to clear and become available hence I had to go with the in person option.

Taxes Are DONE!

2008-04-14T22:00:00.000-07:00

Ever since getting married a year and a half ago, doing taxes has always been my husband's job. It's funny since I pretty much handle everything else financially related, but I've pushed this task onto him. I'm not sure why he did them last year, but I conned him into doing them again this year. We used Turbo Tax to file and they let you compare information from previous years if you have the previous year's tax returns on the same computer. I used that excuse to tell my husband that was why he needed to do the taxes. Oh and I checked and it doesn't matter who the primary filer for our economic stimulus rebate is since the last 2 digits of our social security numbers are within 3 digits of each other. But I don't think we'll be getting our rebate on time anyway since we didn't end up filing until yesterday. We did e-file, but I don't think they can process our returns that quickly. Note the link above states that your returns need to be filed and processed by April 15. That's okay.

I think the reason my husband and I procrastinated so much on the taxes this year is because we knew we were going to owe money. Well at least I knew so I didn't push him to do them sooner. I wanted to change our withholdings midyear so we would get less of a tax rebate, but when I went to the IRS withholding calculator, I found out that we were going to owe taxes. Needless to say, I ended up changing the withholding on my paycheck the other way to get less money, but apparently it wasn't enough. The total additional amount we had to pay was about $4K federal and $2K state. I don't know the exact numbers since C did the taxes. I asked C if we had to pay a penalty since we owed so much in taxes, but he said he didn't see any fines on our return.

I surmised that our withholding issue is related to both our paychecks. Our AGI was significantly higher this year than last due to substantial pay increases and C working for the full year. When C first started his job, his withholding might have been off since he made so little in 2006. He only worked for 1/4 of the year and then I made him contribute almost all of his salary to his 403B. Getting married in 2006 ended up reducing my tax liability significantly.

Ok, that's almost it for my post on taxes. One last thing - if there is anyone out there who still needs to do their taxes, H&R Block is now allowing everyone to use Tax Cut Basic and E File for FREE (I don't think this includes state taxes, but let me know if I'm wrong). Since I used Turbo Tax to do my taxes, I don't know much about Tax Cut, but you can't beat the price.

NCAA Winnings

2008-04-07T21:03:00.001-07:00

I'm so excited! C participated in a Super Bowl pool this year like he does every year. It's a pretty big pool, so while he didn't place first, he was one of the top 5 and won over $150!! This is going to be added to our joint goal.

Today C and I were talking about our trip. This is going to be the trip of a lifetime for us. Things are pretty expensive, especially due to the weak dollar. We can afford to spend what we've budgeted, or more even, but it means giving up on other things we want to spend our money on. Budgeting is about choices and sometimes I just don't know what the right choices are.

To My Loyal Readers

2008-03-29T08:52:00.000-07:00

Sorry for the lack of posting. I have a ton of ideas, but I can' t seem to finish any posts! I've been on a mini vacation for this past week and I'm starting a new project this Monday. Hopefully I'll get back into posting this upcoming week.

In the meantime, here are some random thoughts:

You can really see inflation when you go somewhere to get one specific thing that you haven't purchased a in few years. In my case, C and I went to one of our favorite restaurants in NY. Something that used to cost $20 3 years ago is now $28!

Sometimes I remember something as being better than it really is. It's the idea that absence makes the heart grow fonder.

For some reason, I've always been turned off by Suze Orman. I found one of her books, 9 Steps to Financial Freedom, so I started reading it. It's been pretty good. I remember going to a book signing with David Bach and hearing him say that 80% of what he and Suze says are the same. I started reading the book and it's been great so far. She talks about how our early experiences with money shape our view of money now. Too bad, I can't really remember any of my early experiences with money. I will post some early memories later and you will see how little I remember.

It's important to set a budget when you vacation. C and I are on a work/vacation type vacation (i.e. about half of this trip is being subsidized by own employers). Too bad our employers don't cover the full cost of our meals and shopping!

Does anyone else think that the new frozen yogurt craze (i.e. pinkberry, red mango, et al.) is crazy? I think it's creating a new market. A yummy, healthy (gotta love the fresh fruit toppings) new latte factor! Personally I love red mango.

How Would You Feel If Your Kids Gave Away The Money You Left Them?

2008-03-20T07:30:00.000-07:00

I saw this article in the NY Times about kids who inherit money and give it away. How would you feel if you left your kids an inheritance and they gave it away?

I would be fine if my (future) kids gave away any money I left them, but I would want them to do it gradually if it were a large amount, not all at once when they're 18 or 25. When you're that young, you often are still trying to figure yourself out. I think I'll still be trying to figure myself out when I'm 30, 40, even 50. I hope I'll get a good sense of myself by 50!

So if I had those kinds of assets, I would create a trust for my kids but have a set amount that could be spent/given away per year. I doubt that my kids are going to get too much money from me before I die and since I plan on living to 100, they'll have had a long time to mature and determine what their needs are.

Leaving Money in the House

2008-03-14T12:10:00.000-07:00

A close relative of mine recently moved after living in a home for over 20 years. C and I went over to help with the moving process. After we finished, this relative hired a cleanup crew to help remove some old furniture and odds and ends.

Reflecting on the move, there are some things that could have been done differently.

1. My relative offered us a lot of things in her home, all I had to do was transport it to my place. One thing I should have done is review the items in her house more closely before moving day to determine what I wanted. Now I regret not grabbing a few pieces of furniture and some odds and ends.
2. I found quite a bit of loose change around the house, mostly pennies. Rather than focusing on pennies, I should have thought about what other small items of value were going to be left in the house. The focus should have been small items since those are easily transportable. Even if I didn't want to keep the items myself, I could have sold them on craigslist.
3. Planning ahead makes a big difference. Moving can be a stressful process, but more so if things are disorganized. I could have taken more of a leadership role in helping my relative out.

In the end, there was a lot of money could have been saved or money could have been gained by taking more time to sell some of the left over items. Part of this was laziness on the part of both me and my relative, but you live and learn!

Women Out Earning Men

2008-03-12T08:16:00.000-07:00

I saw this link from MSN showing that less men are bothered by their wives earning more money. I see this phenomenon among many of my friends where the woman out earns the man (or the woman will soon out earn the man once she finishes her education).

Here's some interesting quotes from the article and my thoughts:

"Just 12 percent of men surveyed said they’d mind if their wife earned more than they do, and in general men seemed happy to share the breadwinner role." It seems silly to mind someone bringing home more money. C and I are always happier if the other person brings home more money, but we do joke about the times when we've each had breadwinner status.

"More than 40 percent of women say they do more than their share of housework — and 29 percent of men agree." I think I do more chores than C gives me credit for. Overall either he does more or we're equal. However now that I've become more concerned about living a purpose-filled life, I have started to do more housework.

"One quarter of men surveyed said that their wives aren’t working, but 40 percent of those men wish she did. Of the approximately 75 percent of men whose wives did work, only 5 percent wished she was at home." I want to have the opportunity to stay at home with my kids, when I have them. C thinks it would be more helpful for my personal development and for our family finances if I worked. We disagree on whether it would be better for the kids to have a mom with a successful career or a mom who stays home to take care of them.

"In fact, 35 percent of men and 40 percent of women surveyed said a key benefit of having a spouse make money is that it alleviates the pressure of being the only financial provider." This is part of C's worry. He also is worried that I will be bored at home and call him all the time. I agree that it's possible I'll be bored at home. When I work from home, I do call him a lot since I miss the social interaction I normally have with my co-workers.

I found this to be an interesting, although unsurprising article. I found the statistics most interesting since I like to compare my viewpoints with others.

Insurance Woes

2008-03-07T16:23:00.000-08:00

Sharon from the Frugal Duchess had a great post about checking your medical bills for errors. I wanted to add my own experience to this.

If you get an unexpected bill, make sure you call and confirm:
1. who sent the bill
2. what services you're being billed for
3. whether your insurance was billed or not

If you get notice that your insurance has denied coverage, make sure you call your insurance company to find out why!

Recently I went in for a routine medical visit and had some routine tests done. I received two unexpected bills. The first was from some billing office that my doctor used. When I first mentioned that I received a bill and I thought my insurance was going to cover it, the person I spoke to said that maybe I needed to get a pre-authorization in order for the visit to be covered. I didn't think that was the case since it clearly states on my insurance card that no pre-auth is required. Once she checked the billing record, she found out that they never even sent it to my insurance!

Next I got an invoice from the testing company saying that my insurance had denied coverage. I called the testing company to get more info, but I didn't get very far besides learning when the claim was submitted. Instead they suggested that I call my insurance company. I was able to get some information from the automated system that said one test had been reimbursed and the other was denied. Of course I waited to talk to a rep about why my claim was denied. I found out that it was mis-coded in the system! It was funny that when I called the testing company, they told me that they hadn't received payment for either test when my insurance had already wired the money for one test. I'm guessing that it takes a few days to update payment status.

I can't believe a routine doctor's visit for someone with good insurance turned out to be such a pain!

Here's what I learned:

1. Sometimes doctors will bill you instead of the insurance because they forgot to bill the insurance (I know some doctors that make you do all the insurance reimbursements - what a headache!)
2. Sometimes a company will send you a bill even though your insurance has already paid the claim - call your insurance company to see if they paid
3. Things get miscoded, which could be a reason for denial
4. Insurance companies pay way less than what is billed! I was billed for two tests that cost over $200 together. The insurance company paid half that!

Salary Openness

2008-03-07T10:39:00.000-08:00

I am used to seeing salary secrecy practiced by almost everyone I know, including myself. I only know the salaries of my husband, my immediate family members, and a few friends. I will sometimes talk about my salary in general terms with my friends, but I don't openly discuss it, nor do I bring it up. Somehow I became pretty successful in my career and I think I'm probably making more than most of my good friends, so of course, I don't want to bring it up. I'm probably making less than my former co-workers since a lot of them ended up in I-banking, but I have a much better lifestyle than they do.

The other day I was exposed to a refreshing dose of honesty and openness regarding my plane-mate's salary. We were just about to land when I started chatting with the woman next to me. She told me quite a bit about her life, where she worked, what she did, where she was going, etc. Then she mentioned to me that she gets paid $11/hour plus tips, which was a lot better than the $3.17/hour plus tips that she received when she was living in a different state. I was pretty shocked at her salary openness, but it was pretty refreshing to find someone who was so open with her life.

I don't think it benefits anyone (except our employers) to keep our salaries a secret, yet we do so.

Here's my I keep my exact salary a secret:
1. I'm afraid to be judged (either positively or negatively) based on my salary
2. I'm pretty sure that my employment agreement forbids it

For more salary info of people on the web, check out this post from Madame X.

I just think there's this social stigma attached with discussing money and salary; I can't get myself over that hump. To try to help myself along, but keeping it vague, I'm close to the six figure mark, but I won't pass it this year unless I change jobs.

Lunch Challenge

2008-03-04T20:27:00.000-08:00

Krystal has created a great lunch challenge and invited her readers to participate. The goal is to not spend money on work days on food (lunch, snacks, drinks) from now until March 31. I wish I could participate, but there are too many variable in my life that make participating in this challenge particularly difficult. Here they are:

1. I'm going to be visiting one of my favorite cities, NYC, for one week this month. I will be working, but I will not be getting reimbursed for my meals. It's going to be a semi-vacation, and one of my favorite things in NYC is the food, so I don't want to give that up.
2. I normally get a meal allowance, so technically I get reimbursed for almost all of my weekday meals (I just get a meal allowance, so I do my best to spend the least amount of money possible)
3. I'm going to be working from home for about half the month, so that seems a little like cheating. In my opinion, it's much easier to not eat out when you're at home.
4. It's pretty extreme to bring lunch from home when you get a meal allowance and have no frige at your hotel. I could bring lunch and store it at the fridge at work, but then I would be hogging space in the communal fridge.

Instead I'm doing my own modified lunch challenge. My goal is to only buy lunch once during my normal work weeks (e.g. weeks when I'm not in NYC and not working only at home). I don't want to get too specific, but suffice it to say, I think this is pretty challenging when facing obstacle #4 listed above. When I'm in NY, I'll probably buy lunch 2-3 times. When I'm at home, I don't expect to ever buy lunch out.

If I were working locally, I would have it as a goal to bring my lunch 9 days out of 10, meaning only one lunch out every other week. I just think doing the lunch challenge while traveling is a bit too much for me.

Fighting With My Spouse On Spending Money

2008-03-03T21:04:00.000-08:00

This past weekend, C and I had a few spats on how we do our financial management. He's been feeling that my goals (early retirement) are unrealistic and that I want to sacrifice too much for something that is unachievable. I've been feeling that he doesn't support me in my goals and has misconceptions of what my definition of retirement is.

It's killing both of us to have these arguments since we normally have a great relationship and we're on the same page for a lot of things.

I agree that I may be too extreme in some of my ideas. Hanging around the PF Blogosphere gives you a skewed point of comparison.

My husband and I agreed to put aside our differences for the weekend, but neither of us is completely happy right now with what the other person is thinking/feeling. In response to what my husband said about my goals being unrealistic, I decided to create a spreadsheet showing what I thought our financial picture would look like if we both retired early.

He was right in that we would probably only be able to semi-retire in our forties. My conservative calculations show that we probably need to generate a fraction of our current income in our forties to enable a comfortable retirement later on. I'm still tweaking the numbers, but it has shown me how important it is for us to agree and focus on our financial goals together. After I get feedback from C, I will post some more details on the assumptions I made. I'm also hoping to make the model a bit more complicated since I left out one key factor - inflation.

My husband may not believe in what I share with him from my readings, but he is a big believer of math. It's amazing what compound interest will do!

Personal Experiences

2008-02-27T07:31:00.000-08:00

It amazes me how many personal finance blogs are now out there. It seems like every week I find a new blog that I want to subscribe to. It kinds of makes me wonder why someone would want to read my blog. My posts are not as useful, well thought out, nor frequent as other bloggers I admire.

In the end, what we're all sharing about is our personal experiences with our own writing styles and our own struggles. I struggle with an dilettante's obsession with personal finance. I've always been more of a generalist in life than a specialist and it shows in the number of extracurricular activities I was involved in while in high school, the things I studied while in college, and even to some extent my career. I wish I could be more driven to track things like Madison at MyDollarPlan or even as dedicated as Millionaire Mommy Next Door with my investment plan. I wish I could devote the time and dedication come up with a solid long term plan rather than just a general idea of where we want to be in at major milestones in our lives.

I just finished reading Your Money or Your Life: (aff link) which I checked out from the local library. I had skimmed through the book before when I was at a relative's house and saw a copy. That was back when I was first getting into personal finance and I thought that a lot of the ideas seemed pretty kooky (e.g. what are you trading your life energy for), but now it seems like a good thing to sit down and actually do the program.

I've convinced C that we should read the book together and do the exercises together since we need to do a better job of managing our finances together. I hope that C and I can read the book and finish the exercises by the end of the year.

Cutting Out Recreational Shopping

2008-02-25T20:16:00.000-08:00

Many people enjoy recreational shopping, where one goes shopping for fun without actually needing anything. Yesterday C suggested that we go to the mall. This immediately raised red flags for me since I've come to realize that we just have so much stuff (we fill all the closets in our home and we could still use more storage space). I asked him what he needed and he tentatively said work clothes. Upon asking about what type of work clothes he needed, I surmised that he didn't really need work clothes or if he really needed more work clothes, he should give away some of his current clothes.

My life isn't like Colin's at No Impact Man, but I am really starting to question the things that we buy. Colin is also helping to influence me to think more about my carbon footprint and my impact on the environment. One way I'm trying to reduce my impact on the environment is to cut down on my recreational shopping. Now for each item I buy that is non consumable, I think a few questions to myself:

Do I really need this?
Am I going to use this?
Do I have room to store this?
Is this going to replace something else I already have?
If yes, do I need this?

Ok I admit, I don't think about all of these questions before purchasing something. I do try to at least think about 1&2. If it's something that I'm going to use a lot and it's going to make my life a lot easier, I will go ahead and buy it (e.g. we just got a salad spinner).

Thinking About Job Searching

2008-02-22T12:42:00.000-08:00

I have always thought that you should stay in a job that is part of your career path for at least 2 years. I'm nearing my 2.5 year anniversary with my current company and I'm getting antsy. These past few weeks I've been learning more about what I don't want to do. But I'm still at odds with what I do want to do.

When I first started this job, I knew that it would not be feasible for me to be in this profession long term. Weekly travel is not conducive to family life and I want to have kids in about 2 years. I think it's bad to go on maternity leave too soon after getting a new job, so ideally I should be getting a new job now, or at least preparing for it.

On the other hand, I don't think I'm ready to leave. I love the travel points I get. I don't think I have to work too hard, although most of my friends and family consider my weekly travel to be a larger burden than they're willing to bear. I, on the other hand, love it. I think I could get to six figures pretty easily in my current job (of course since I'm pretty close, I could also get to six figures by switching jobs). I'm in a company when growth, promotions and career advancement are based on you as a person, not about a new position opening up or someone leaving. I have a good reputation which should allow me to be more picky about what I want to do, as I get a better handle of what that is.

I vacillate between thinking about where I want my career to go, but I feel the clock ticking.

Fear of Posting

2008-02-21T16:05:00.000-08:00

I have a great fear of being totally honest when writing since this is supposed to be an anonymous blog. There are so many details in my life that are very unique and I fear posting about them all would make it super obvious who the author is to any friends or co-workers stumbling upon this.

I also am exposed to a lot of information that I think would be of interest to my readers and my target audience through my job, but of course, I want to keep those items a secret. A lot of those things are open information available to anyone who wishes to pursue it. But some topics are so specialized that I would fear my colleagues doing a search on a specific intricacy related to the financial services industry and finding my post if I actually wrote about it.

Here is something I wanted to write about, but didn't publish earlier because of my fears. Also, my blog postings are often more generic that I would like them to be due to my fear of being made known.

Last year I had the opportunity to go on an international business trip. My husband was able to tag along – basically for free. He stayed in my hotel room and we were able to get my company to reimburse his airfare. I’m really happy that we were able to get his airfare reimbursed, but it did come at a taxable cost to us. Rather than flying business class, as company policy allowed, I flew coach class. My ticket plus my husband’s ticket was less than the cost of one business class ticket, so our vacation also saved the company money! We were able to save on food costs by getting food at the grocery store. Some of our money saving tendencies really are habits, so we don’t even think twice about them. I think in the end, my meal allowance more than covered the cost of our food. I realized after the trip was over that we didn’t even go out for one nice dinner! We would go to semi-nice dinners, but it was almost always less than the cost of my meal allowance for one person. We also ended up taking quite a bit of money out of the ATMS (we were in multiple countries). My main tip on foreign ATM usage is to try and take all the money you’ll need once to save those pesky fees from adding up. We got charged an out of network fee, plus conversion fees, plus who knows what else. In the end since the trip didn’t really cost us anything, I didn’t sweat these small one time charges too much, but as someone who almost never gets charged ATM fees (I think I used one out of network ATM in the U.S. in my life) it was shocking to see my money being eaten away by fees!

An Unexpected Find

2008-02-18T19:59:00.000-08:00

I was at my mom's house the other day and I decided to take some of my old magazines from childhood. I thought I might be able to sell them online - one time I had put an ad for them on craigslist and someone offered me $40 for the box. This was a couple of years ago, and I didn't end up selling them then since the timing wasn't right. I figured I should be able to get at least that much, if not more. I went over to ebay and I saw that someone sold a lot of these magazines (30 in all) for over $200! I was shocked and surprised! I need to do some research as to whether it's worth the time and effort to list each magazine individually or to just sell them as a lot. I don't even know how many magazines I have, but it should be enough to get me a lot further than 1% towards my goal of generating $2,000 in online income this year!

Switching from a Regular 401K to a Roth 401K

2008-02-15T12:46:00.000-08:00

My company recently began to offer the Roth 401K as an retirement option in addition to the regular 401K. Today was payday for me, so I decided to check to see if all my direct deposits made it safely to my bank accounts (I am somewhat compulsive on certain items and I have my direct deposit going to 5 different accounts). I checked Bank of America, where I keep my ATM withdrawal money (I'm not happy with their interest rates or customer service, but they do have the best coverage in terms of locations and ATMs for those who travel around the U.S.). I was surprised to see that the money hadn't hit yet.

I decided to log online to check out my paychecks. When comparing my most recent paycheck to my last one, I realized that this was the first time my Roth 401K contribution was withdrawn. Then I realized that the Roth 401K contribution seemed a lot larger than my prior month's contribution. So I went and looked at my last paycheck from January and saw that this paycheck's contribution is almost 39% higher. !!! WTF!?!?!?! This resulted in a 21% less money going to my various savings/checking/investment accounts. I thought I had decided to contribute the same percent of my income to the Roth 401K as the regular 401K.

This is going to require further investigation, but it did make me think about one thing - should I just max out my 401K contributions now* and get a much larger paycheck later in the year? At my current rate of contribution, I'll probably max out in 6-8 months, depending on any raises I get this year.

*For some of you out there, this might not be a good idea due to the way certain companies calculate matching contributions. For me, it doesn't matter since the company match is calculated at the end of the program year and it's so small with a somewhat long vesting period that I'm not sure if I'm ever going to keep any of the match. If your company calculates the match on each paycheck's contribution, it makes sense to time out your contributions to get the full match.

Becoming The Jones

2008-02-13T20:36:00.000-08:00

There's a lot of talk about not keeping up with the Jones, but what happens when you become the Jones?

C and I were out with friends. We were talking casually and we discussed going on a weekend trip together. C and I were encouraging our friends to take the trip with us. For us it would have been minimal cost since I travel a lot for work, hence I get perks like free flights. It was a very casual conversation and it probably wouldn't have gone anywhere due to lack of initiative to plan. Anyway, then our friends told us that they're not planning on taking any trips this year since they're in debt from their recent wedding. I quickly said that I understood and that it was great that they were working on getting out of debt.

Moments later, I realized that we were the Jones, encouraging them to spend more money than they could comfortably afford! I'm really proud of the fact that they said no. I wasn't aware of their financial situation and I would never want to encourage someone to do something that goes against their life goals.

January Spending Review

2008-02-11T20:30:00.000-08:00

I am pretty proud to say that my husband and I did a pretty decent job of tracking our expenses for the month of January! I have always been a fan of automated savings, and just spending everything that was left so I didn't really have a good idea of where our money was going. We decided to track all expenses except those expenses that are fully reimbursed by our employers. For example, for any business trips we took, we didn't count the cost of hotel, rental car, airfare, etc. I did count the cost of meals since both my husband and I get per diem when we travel. Per diem is a meal allowance that we got for each day, no matter what we spend. So if I spend $100 on food, some of that is coming out of my own pocket, whereas if I only spend $10 on food, I get to add some extra savings to our monthly inflows.

So here is the breakdown.
Total expenditures: $4,965.48*
Rent: $1,600.00
Tithe: $1050.00
Eating Out $707.92
Gifts $307.70
Groceries $285.45
Misc. $279.68
Monthly Bills $195.87
Travel $165.21
Entertainment $88.00

Since I didn't have any preconceived notions about where our money was going, I was happy that C and I were able to have at least a 1 month record showing the granularities of our expenses. I knew we spent a lot of money on eating out, but I didn't realize it's about 2.5 times as much as we spend on groceries! A lot of this is due to travel schedules. I found it interesting that C and I only had 4 meals out together and only 2 meals out together with just us. Included in those 2 meals we had with others also includes us treating others due to special occasions. I have tried to emphasize that I want our meals out with just us to be special affairs that we really enjoy, rather than an act of convenience. We eat out by ourselves as an act of convenience too much as it is!

Our monthly bills are also missing our monthly electricity bill. We got one at the end of December and another one at the beginning of February. I'm not sure why that happened, but I decided not to include it in our monthly review since we didn't have to pay it out in January.

I thought that our spending on gifts might be abnormally high, but I figure in other months there are other one off items that would offset a lower amount spent on gifts. The travel budget was spent on a weekend trip where some of the expenses were paid in December, so this cost here is less than the cost of the trip, but accurate of what we spent in January.

I know that we forgot a couple of expenses here and there, but this is a good snapshot of what our monthly expenses are. I'm pretty comfortable with this. The main thing I would want to change is to decrease the amount we spend on eating out and increase the amount we spend on groceries!

* Note this does not include automatic payroll deductions like taxes, 401K savings, health care, long term disability insurance, flexible spending accounts nor other savings

Update on Goals

2008-02-09T09:00:00.000-08:00

It seemed like I was waiting for January to pass and before I knew it, it's almost the middle of February.

First, I want to say thank you to Well-Heeled for giving me the code for the progress side bars. As you can see, I only have 2 side bars, but if you remember, I had 3 goals for the year. I'm not really sure how to track my fitness goal of running. Maybe I'll put up a progress bar for 13 miles and as progress, I'll put up the farthest I've run without stopping (as of this writing, it's only been 2.5 miles and it's taken me a long time to build up to that length).

For my goal of earning $2000 of online income, I only had a dismal $25.99 for January. I need to spend some time on this blog to put it in a position to earn at least a little bit and start selling some stuff online.

For my goal of obtaining $25,000 in my early retirement goal, I wasn't able to amass the amount I needed and I was hurt by the stock market fluctuations since I have the majority of that money invested in the S&P 500. I'm planning on doing some research on alternate investment ideas and thinking about adopting Millionaire Mommy Next Door's investment strategy. I was able to add $890 to this fund. But since I realized that I would still need to add $1212 a month if I had 9% returns and I had negative returns in this month, I'm going to need to make up for the shortfall. One way I'm going to try and make up for the shortfall is I'm going to add my complete per diem meal allowance gained when traveling minus expenses to my retirement account. This will probably add another $100-$200 per month. On the side bars, I have tracked this as a goal of $16,000 rather than $25,000 since I started out with $9,000 at the beginning of the year.

Also I wanted to say thanks to Brip Blap for including me in the Carnival of Financial Goals III. Check out the carnival to see what other goals people have!

Managing Holiday Gift Expectations

2008-02-05T20:46:00.000-08:00

Valentine’s Day may be a holiday promoted by the greeting card industry and their subsidiaries to get us to spend more money. There are numerous ideas out there on how to save money for this upcoming holiday. When you’re in a committed relationship, I think the holiday is all about expectations.

My husband and I are making an effort to spend less on stuff and to spend more on experiences. That doesn’t mean that a girl like me doesn’t appreciate the loving trinket here and there. One of my favorite presents my husband gave me was something that cost less than $10, but it was extremely thoughtful and completely unnecessary. It was a little trinket that he found with my nickname on it.

This year to manage expectations, C and I made a deal. We will be getting each other gifts, but the max price on them is $25. This way no feelings are hurt if one person spends a lot more or if one person decides to forgo the commercialism and get the other nothing.

Of course when you’re in a new relationship, it might not be so easy to be forthcoming and manage expectations. My friend and her boyfriend agreed not to buy presents for each other this past Christmas. However his friends were convinced that when they said no presents, she would still expect something (to a certain degree, I would agree that I would expect something small). He ended up getting her theater tickets, which she loved, but then she had to scramble to get him something. I think it’s much easier when you can honestly communicate with your significant other to ensure that expectations are met.

My Ethical Dilemna

2008-02-01T17:28:00.000-08:00

I saw that PaidTwice posted about a recent ethical dilemma she faced, which reminded me to post about something I had been thinking about.

I travel a lot for work. What amenity items are really mine for the taking and which are ethically questionable for me to take? I come from an ethnic background that is stereotypically cheap. I'm not that surprised when I see hotel emblem bearing towels at the homes of friends' parents. For me, anything that is not meant to be consumed while in the hotel is off-limits. In addition, large quantities of consumables put in the room for the comfort of the guest is also off limits in my book (that would mean the extra roll of toilet paper, etc.).

However, I am a big believer in taking the mini shampoos, soaps, etc. I use some of these items myself while at home, but I have decided to donate the majority to a local homeless shelter. On a side note, I can't believe it took me several months to find a homeless shelter to donate to - I called a few, expecting to get a call back and there was no response! My web searching wasn't too helpful in finding an acceptable place (i.e. in the San Francisco), so I finally contacted the city government office on the homeless and they were able to put me in touch with a shelter that was easy to give to and very grateful for the donation.

Now the area which I am starting to question of removal of the consumable goods provided for guests is on two fronts. The first front is on the coffee and tea packages provided in the hotel room. My thinking is if I only take what I normal person would consume in one evening, it's acceptable practice. Hence if I take home a bag of tea or two, that's perfectly acceptable (I don't trust the cups in the hotel, so it's unlikely that I'll enjoy the tea there, but I'm very happy to consume it in the comforts of my home).

The second area of my thoughts might be too much information for some of you, especially the men out there. I fly a lot - pretty much twice a week. One thing I noticed was that airplane bathrooms always have feminine products. Most planes seems to only have pads, but the airline I take normally has pads and tampons. Of course, these are amenity items for passengers to use. Most of the time I'm too comfortably ensconced in my seat to bother going to the bathroom, but on the occasions that I'm there, I will often grab one or two items. Would it be unethical for me to take a pad or tampon each flight I take, despite the fact that I'm not using it immediately? This could save me from every having to purchase feminine products again! Of course, so would investing in and learning to use the divacup.